You’re probably losing money. If you’re a developer or a small studio making under a million bucks a year, and you’re still handing over a 30% cut to Apple or Google, you’re basically donating to a trillion-dollar company for no reason. It sounds harsh, but it’s true. The app store small business program—both the Apple and Google versions—was designed specifically to stop that bleeding, yet a surprising number of founders forget to check the boxes or mess up the eligibility requirements once they start scaling.
The "App Store Tax" was the shot heard 'round the tech world. Remember the Epic Games vs. Apple lawsuit? That whole mess, combined with intense pressure from regulators in the EU and the US, forced the giants to blink. They didn't do it out of the goodness of their hearts. They did it because they had to. Now, we live in a world where the "standard" 30% commission is actually only for the big fish. For the rest of us, it’s 15%.
But here’s the thing. It isn't automatic.
Apple won’t just send you a "Congrats!" email and stop taking your money. You have to apply. You have to prove you qualify. And if you’ve got multiple associated accounts, things get messy fast.
The Reality of the 15% Commission Rate
Back in 2021, Apple launched the App Store Small Business Program. Google followed suit shortly after with its own version for the Play Store. The premise is dead simple: if your total proceeds (what you take home after the cut) are under $1 million in the previous calendar year, you qualify for a reduced 15% commission on paid apps and in-app purchases.
It’s a massive deal. Think about it. That 15% difference is often the margin between being profitable and just breaking even. It’s the salary of a part-time QA tester or your entire monthly server budget.
There are nuances people miss. For Apple, the $1 million threshold is based on post-commission earnings. If you gross $1.2 million but Apple took their 30% and you ended up with $840,000, you’re technically eligible for the following year. Google handles it a bit differently; they give the 15% rate on the first million dollars of earnings every single year, regardless of whether you’re a tiny indie or a mid-sized corporation. Once you cross that million-dollar mark in a given year on Google Play, the rate jumps to 30% for every dollar earned after that.
Why Everyone Gets the Eligibility Wrong
The biggest trap is the "Associated Developer Account" rule. Apple is incredibly strict about this. You can't just spin up five different LLCs, launch five different apps, and claim the 15% rate on each one to dodge the $1 million cap. If you own or control other accounts, Apple views them as one entity.
I’ve seen developers get kicked out of the program—or denied entry—because they had a dormant account from ten years ago linked to the same person.
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Google's "Account Groups" work similarly. You have to declare all related accounts. If you try to game the system by splitting your apps across different identities, you’re asking for a permanent ban. It’s not worth it.
Honestly, the paperwork is the easy part. The hard part is the timing. If you cross the million-dollar threshold mid-year on Apple’s platform, you lose the 15% rate for the rest of that year and the next year. It’s a "cliff" rather than a gradual slope. On the flip side, if your business dips back below $1 million, you aren't automatically re-enrolled. You have to wait until the next calendar year and re-apply.
Navigating the Apple vs. Google Differences
Let's look at the friction points.
Apple’s program requires an actual application process. You go to their developer portal, sign in, and attest that you don’t have associated accounts exceeding the limit. Then you wait. Usually, it takes a few days, sometimes a couple of weeks.
Google is a bit more integrated into the Play Console. You still have to set up your "Account Group," but the way they apply the discount is much friendlier to growing businesses. Since Google gives everyone the 15% on the first million annually, you don't have that "fear of success" where hitting $1,000,001 suddenly costs you an extra $150,000 in fees.
The Subscription Loophole (That Isn't Really a Loophole)
A common misconception is that the app store small business program is the only way to get a 15% rate. That’s not quite right.
For years, even before these programs existed, both platforms offered a 15% rate for "long-term subscribers." If a user stays subscribed to your app for more than 12 months, the commission automatically drops to 15% for that specific user.
Does the small business program stack with this? No.
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If you’re in the small business program, you pay 15% from day one. If you’re a big company (like Netflix or Spotify, though they have their own battles), you pay 30% for the first year of a user’s subscription and 15% for the second. Basically, the small business program just levels the playing field for new acquisitions.
What Happens When You Scale?
Growth is great, right? Usually. But in the world of the app store small business program, hitting that $1 million mark is a bittersweet milestone.
Imagine you’re a solo dev. Your app goes viral in November. Suddenly, your total proceeds for the year hit $1.1 million. On Apple’s platform, the 15% rate is immediately revoked for the rest of the year. For every dollar you make in December, you’re handing over 30 cents.
And it gets worse. You’ll be disqualified for the entirety of the following year.
You need to plan your cash flow around this. If you know you're going to hover around that $1M line, it might actually be more profitable to spend more on user acquisition (UA) to blow past the limit and reach a scale where the 30% cut doesn't hurt as much, or conversely, to slow down and stay under the cap to preserve your margins. It’s a weird, counter-intuitive "valley of death" for mid-sized developers.
Hidden Costs and Global Regulations
We can't talk about these programs without mentioning the shifting landscape in the EU with the Digital Markets Act (DMA). Apple has introduced new business terms for developers in the European Union that involve a "Core Technology Fee" (CTF).
If you opt into the new EU terms to use third-party app stores or alternative payment processors, the app store small business program still exists, but the math changes. You might pay a 10% commission instead of 15%, but you might also have to pay €0.50 for every first annual install over a certain limit.
It’s a headache. A genuine, migraine-inducing headache.
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Most small US-based developers should probably stick to the standard Small Business Program and avoid the new EU business terms unless they are specifically building an alternative app marketplace. The "old" system is predictable. The "new" system is a gamble.
How to Actually Apply Without Messing Up
Don't rush the application.
First, audit your accounts. Do you have an old "test" account from college? Is your business partner listed on another developer entity? Sort that out first.
Second, check your numbers. Remember, Apple looks at "proceeds," which is the amount you receive after their 30% cut. If your raw sales are $1.3 million, you might still be under the $1 million proceeds threshold ($1.3M * 0.7 = $910k).
Third, monitor your email. When you apply for the Apple program, they will send a confirmation. If you don't get it, or if they ask for more info about your corporate structure, answer them immediately. If you miss their window, you might have to wait another year.
For Google:
- Go to the Play Console.
- Navigate to the "Associated Developer Accounts" page.
- Create your account group.
- If you're under $1M, the 15% rate applies automatically to those first earnings, but you must have your account group properly defined or you'll face audits later.
Actionable Steps for Your App Business
Stop treating the 15% or 30% as a "fixed cost" you can't control. It is a variable that depends entirely on your status within these programs.
- Audit Your Related Entities: Make a list of every developer account you, your partners, or your parent company owns. If you don't disclose them, and Apple/Google finds out (and they will, via credit card info or IP addresses), you’ll be banned from the program and possibly the store.
- Calculate Your "Cliff" Point: If you are nearing $800k in proceeds, start modeling what your net income looks like if you hit $1.1M. You might find that earning $990k nets you more actual profit than earning $1.1M because of the commission jump.
- Keep Documentation: If you sell an app or acquire one, keep the legal paperwork. Apple requires documentation to prove that an account transfer wasn't just a sham to stay under the small business cap.
- Review EU Terms Carefully: If you have a large European user base, use the calculators provided by Apple and Google to see if switching to the DMA-compliant terms actually saves you money. For 99% of small businesses, it won't.
The app store small business program isn't a subsidy; it's a hard-won concession. It is your right as a small developer to pay the lower rate, but the burden of proof is on you. Take an hour this week to verify your enrollment status. That hour could quite literally be worth $150,000.
Stay on top of the revenue tracking in your dashboard. Don't wait for the end of the fiscal year to realize you overpaid or missed a deadline. This is your margin. Protect it.